Case Study: To Fix or Not to Fix? The Million Dollar Question.
This is the story of two homes. These homes are located in San Jose CA, one of the hottest real estate markets in California if not the nation. These 2 homes had nearly identical seller circumstances. The homes condition, size, features and floor plan were identical. The homes were located within 1 mile of each other on very similar streets. For comparables purposes – identical. Home ‘A’ DDRE guided repairs and a cosmetic refreshment, Home ‘B’ was sold by another agent “as-is”.
I’m going to lead with the finale; The DDRE “refreshed” home (Home ‘A’) sold for $265,000 more than Home ‘B’. A whopping 124% higher sale price. By employing modest refreshes and repairs, this seller netted an extra $222,000 in their pocket by agreeing to invest $43k, which we fronted and the seller paid us back at the close of escrow.
A bit of seller background… Both homes in this comparison were sold in Probate. This means that the homes were part of an estate that was managed in part by the state of California and a probate administrator. It is an administrator’s job to gather all of the assets of the estate, pay the debts of the estate, and distribute the assets to the beneficiaries in accordance with the will or the laws of intestate succession. All of this will occur under the supervision of the probate court.
Most often a home is the largest asset in the estate and many times these homes are in a state of disrepair or deferred maintenance. In our comparison both Home ‘A’ and Home ‘B’ fell into this category. Dysfunctional kitchens, missing floor coverings, plumbing, electrical, HVAC and we would say uninhabitable conditions.
The probate administrator for our property (Home ‘A’) was also a beneficiary. The proceeds from the sale of the home would be life changing for her. As the DDRE team made on-site visits to evaluate the condition and what we needed to do for the estate it became very clear we were going to have to fix the property to maximize the sale price for our client. In our case the estate did not have any funds to fix and refresh the property. At DDRE we have our Go To Market Program to help sellers in this exact circumstance. We got to work right away and the estate did not pay any upfront costs for the fixes and improvements – We covered it.
DDRE specializes in Probate and Trust sales and these are very common circumstances for a probate sale not having any funds available to repair and refresh a property. Obviously we are very proud of our probate and trust work. This isn’t just a real estate transaction to us, it’s a passion to help people in very difficult circumstances.
Details, Details, Details.
| DDRE Home ‘A’ | Other Agent ‘B’ | |
| Property List Date | 6/25/2021 | 9/3/2021 |
| List Price | $1,298,000 | $829,000 |
| Sale Type | Probate | Probate |
| Initial Condition | Poor | Poor |
| Living SqFt | 1,495 | 1,495 |
| Lot Sq Ft | 6,133 | 6,113 |
| Bedrooms / Baths | 4 / 2 | 4 / 2 |
| Floor Plan | Identical | Identical |
| Zip Code | 95123 | 95123 |
| Condition at Sale | Good | Poor |
| Days on Market (DOM) | 5 | 7 |
| Refresh Cost | $43,015 | “As Is” |
| Sold Price | $1,365,000 !!! | $1,100,000 |
Where we started.
Take a look at the gallery below to see the conditions of both Home ‘A’ and Home ‘B’. Very comparable in all respects. Our property, Home ‘A’ may be worse in many ways but the work needed for each home is essentially the same.
Front of Home - Curb Appeal
- Front of Home - Curb Appeal
What was the budget?
| Extra Keys = $5.72 | Hauling & Cleaning = $630.00 |
| Appliances = $2,727.69 | HVAC Repair = $500.00 |
| Construction Repairs = $2,139.17 | Property Inspections = $750.00 |
| Counters / Stone Work = $4,922.62 | Landscaping = $4,920.00 |
| Electrician = $2,889.00 | Painting = $8,000.00 |
| Fixtures & Materials = $2,229.50 | Plumbing = $900.00 |
| Handyman = $1,181.25 | Property Staging = $3,300.00 |
| Flooring = $7,915.00 | |
| Refresh TOTAL $43,015.00 |
The Completed Refresh with DDRE
Obviously there are never guarantees but our experience in the marketplace and understanding what needs to be done to make a home not just market ready but market actionable has been proven time and time again. View the gallery Below and see what a modest investment in the property yielded. This is Home ‘A’ as it went to market. Home ‘B’ went to market in the same condition as it started, “as-is”.
So… Should I fix before I sell? YES! As we’ve demonstrated the value proposition is there to improve the sale price. Will there be times it doesn’t make sense to refresh? Also Yes. Every circumstance is different that’s why it’s important to discuss with us first before your decision. Start at step 1. How We Do It
Note: We’d like to be clear, this comparison is not to diminish the other agent who sold their clients home “as-is”. We’ve certainly sold homes “as-is”, it’s just not our preference to market an underperforming home. Ultimately it is the client’s decision to fix or not but a major barrier to clients repairing and improving a home for sale is funding. This is why we developed our Go To Market Program. If the agent selling the home “as-is” had the resources she might of had a better outcome for her client. Hopefully this comparison will inspire your thoughts on the topic when it’s time for you to sell your home.
Disclaimer:
Your results will vary. Past performance no guarantee of future results. Batteries not included. 😁
The subject properties in this comparison:
Home ‘A’ 6235 Hancock Avenue, San Jose CA
Home ‘B’ 482 Shawnee Lane, San Jose CA